Davenport v. North Carolina Dept. of Transp.

• Decision Date: 18 August 1993
• Docket Number: No. 91-1266,91-1266
• Citation: 3 F.3d 89
• Parties: Ronald E. DAVENPORT, Plaintiff-Appellant, v. NORTH CAROLINA DEPARTMENT OF TRANSPORTATION; Tommy Harrelson, Officially as the current Secretary of Transportation; James E. Harrington, Individually and Officially as former Secretary of Transportation; E.H. McEntire, P.E., Individually as former Chief Engineer/Raleigh; Cloyce B. Alford, Individually and Officially as former Director of Personnel; G.R. Shirley, Individually and Officially as Division Engineer/Greenville; Jerry Hardesty, Individually and Officially as former Assistant Secretary of Transportation; Sue Sutton, Individually and Officially as DOT Employee; Michael Sutton, Individually; Randy Doub, Individually and Officially as a former DOT Board Member, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 89

3 F.3d 89

Ronald E. DAVENPORT, Plaintiff-Appellant, v. NORTH CAROLINA DEPARTMENT OF TRANSPORTATION; Tommy

Harrelson, Officially as the current Secretary of

Transportation; James E. Harrington, Individually and

Officially as former Secretary of Transportation; E.H.

McEntire, P.E., Individually as former Chief

Engineer/Raleigh; Cloyce B. Alford, Individually and

Officially as former Director of Personnel; G.R. Shirley,

Individually and Officially as Division Engineer/Greenville;

Jerry Hardesty, Individually and Officially as former

Assistant Secretary of Transportation; Sue Sutton,

Individually and Officially as DOT Employee; Michael

Sutton, Individually; Randy Doub, Individually and

Officially as a former DOT Board Member, Defendants-Appellees.

No. 91-1266.

United States Court of Appeals, Fourth Circuit.

Argued Dec. 3, 1992.

Decided Aug. 18, 1993.

Monroe Jackson Nichols, Crisp, Davis, Schwentker, Page, Currin & Nichols, Raleigh, NC, argued (Lynn Fontana, Crisp, Davis, Schwentker, Page, Currin & Nichols, on the brief), for plaintiff-appellant.

James Peeler Smith, Special Deputy Atty. Gen., North Carolina Dept. of Justice, Raleigh, NC, argued (Lacy H. Thornburg, Atty. Gen., Isham B. Hudson, Jr., Sr. Deputy Atty. Gen., Patsy Smith Morgan, Asst. Atty. Gen., North Carolina Dept. of Justice, on the brief), for State appellees, Thomas E. Barwick, Walker, Young & Barwick, Goldsboro, NC, on the brief, for appellee Sutton.

Before PHILLIPS, Circuit Judge, and SPROUSE and CHAPMAN, Senior Circuit Judges.

OPINION

PHILLIPS, Circuit Judge:

Ronald E. Davenport appeals an order dismissing his action against the North Carolina Department of Transportation (DOT) and nine individuals for allegedly politically-motivated conduct resulting in Davenport's discharge from employment as a DOT engineer. Davenport sought remedies under 42 U.S.C.A. Sec. 1983 for alleged violations of his constitutional rights to due process of law and freedom of association and, under state common law, for civil conspiracy.

The district court granted DOT's motion for summary judgment, holding that the Sec. 1983 claim was merged by claim preclusion in a prior state court judgment rendered in judicial review of an administrative award to Davenport as remedy for his discharge, and that his claim for civil conspiracy failed as a matter of law on the summary judgment record. 776 F.Supp. 1080. We vacate as to both claims.

I

The facts, recited in the light most favorable to Davenport as nonmovant on the motion for summary judgment, Pulliam Investment Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir.1987), are as follows:

At the times in issue, Davenport, a registered Democrat, worked as a district engineer in the Lenoir County District office of DOT. He also performed private survey work under a DOT permit, which restricted such activity to approximately ten hours per week during evenings and weekends. In 1986, that private work came to the attention of appellee Michael Sutton, who chaired the Lenoir County Republican Party. Sutton initiated a meeting with appellee Jerry Hardesty, who was then DOT Assistant Secretary, to discuss allegations that DOT employees, including Davenport, were misusing state resources to further their private businesses.

At approximately the same time, appellee Sue Sutton, Michael Sutton's wife, submitted to Hardesty her application for employment as Davenport's secretary. Sue Sutton was hired in November 1986, over Davenport's objections that other candidates were more qualified. She soon began collecting what she felt was evidence of Davenport's misuse of state resources. She gave the information, including photocopies of documents taken from Davenport's desk, to her husband. In the interim, Hardesty initiated an investigation into Sutton's allegations against Davenport, who was suspended without pay in March 1987 pending the outcome of a probe by the State Bureau of Investigation.

At the time, Davenport was subject to the protections of the North Carolina State Personnel Act, N.C.Gen.Stat. Secs. 126-1 et seq. (1991 & Supp.1992) (the Personnel Act). The Personnel Act requires just cause for any discharge, suspension, or reduction in pay or position, and notice of the "specific acts or omissions" alleged to justify such disciplinary action. Id. Sec. 126-35(a). In conjunction with the North Carolina Administrative Procedure Act, id. Secs. 150B-1 et seq., the Personnel Act also creates a three-tier appeal process, beginning with the filing of a "contested case" before an administrative law judge (ALJ) and culminating in substantial-evidence review in the state court system. Id. Secs. 126-37, -38, 150B-45, -51.

Davenport appealed his suspension within DOT, requesting a hearing on the matter. He received none, however, despite the fact that the suspension was extended twice. In September 1987, DOT dismissed him for misuse of agency facilities, equipment and personnel. Davenport then filed a petition for a contested case hearing, claiming that DOT lacked just cause for his dismissal and had failed to follow the proper procedures "in violation of [his] constitutional rights." J.A. at 194-95.

Two months later Davenport filed a Sec. 1983 action in Pitt County against DOT and four of its officials or employees. ¹ He alleged that the Personnel Act gave him a property interest in his job; that his dismissal was politically motivated; and that defendants had violated his Fourteenth Amendment right to due process. The court denied Davenport's request for a temporary restraining order staying his suspension and dismissal, and instead stayed the Sec. 1983 case pending the outcome of the administrative hearing.

Davenport was represented by counsel before the Office of Administrative Hearings (OAH), see J.A. at 194-197, and evidence was taken in compliance with the rules generally applicable in North Carolina trial courts. N.C.Gen.Stat. Sec. 150B-29. He had full discovery rights, id. Sec. 150B-28(a), and was free under the Personnel Act to show that his dismissal was motivated by discrimination based on his political affiliation, id. Secs. 126-36, -37(a). Although it appears that Davenport then believed his suspension and dismissal stemmed from disgruntlement over his resistance to hiring Sue Sutton, J.A. at 385-86, it also appears that throughout the administrative hearing he was unaware of Michael Sutton's interactions with DOT officials. Consequently, he made no allegations regarding Sutton's involvement in his dismissal to support a finding of political discrimination. Instead, he alleged (1) that the agency lacked just cause for its actions because he had not misused his position for his own private gain; and (2) that the agency had failed to provide him with the presuspension and predismissal notice and hearing to which he was entitled by statute.

The ALJ agreed with these contentions, and recommended reinstatement with full benefits, back pay, and attorneys' fees. J.A. at 235-36. That recommendation ultimately was approved after interim appeals and cross-appeals culminating in final judgment on judicial review by the North Carolina Court of Appeals. North Carolina Dep't of Transp. v. Davenport, 102 N.C.App. 476, 402 S.E.2d 477 (1991). ² Davenport was reinstated in a different position at the same grade and pay as his former position. The adequacy of that reinstatement is under separate litigation.

At some point following the OAH hearing, Davenport discovered evidence of the meeting between Hardesty and Michael Sutton and specific evidence of a partisan patronage hiring system at DOT, including Sue Sutton's alleged proclamation that Davenport would never return to DOT "as long as the Republican Party was there." J.A. at 412-13. In August 1990, while DOT's appeal of the administrative judgment was pending before the North Carolina Court of Appeals, Davenport voluntarily dismissed his original Sec. 1983 claim. He filed the instant action four days later in Wake County, adding five defendants; an allegation that defendants' politically-motivated actions violated his First Amendment right to freedom of association; a claim for civil conspiracy; and a request for punitive damages. The new complaint also named most of the defendants in their individual as well as their official capacities, and alleged specific harms including emotional distress and injury to professional reputation. ³ J.A. at 40-47.

DOT removed to federal court over Davenport's opposition, and the district court denied his motion for remand. The defendants raised defenses including the contention that the pending Sec. 1983 claim was merged as res judicata in Davenport's administrative judgment. The district court granted DOT's motion for summary judgment as to the Sec. 1983 claim on that basis. The court also concluded that Davenport's evidence raised no genuine issue of material fact with respect to the civil conspiracy claim and on that basis dismissed it. Davenport v. North Carolina Dep't of Transp., 776 F.Supp. 1080 (E.D.N.C.1991). This appeal followed.

II

We first consider the district court's dismissal of Davenport's Sec. 1983 claim on the basis of claim preclusion: that it was merged in the favorable judicial judgment upholding his state administrative award.

As the district court rightly recognized, see 776 F.Supp. at 1083-84, federal courts asked in a Sec. 1983 action to give res judicata effect (in any of the doctrine's aspects) to a state court judgment are bound under the Full Faith and Credit statute, 28 U.S.C. Sec. 1738, to apply the law of the rendering state to determine whether and to what extent the state court judgment should have preclusive effect in the federal action. Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984). The question here, then, is whether, if the instant Sec. 1983 action were pending in a North Carolina state court, the North Carolina courts would give the earlier ...